As the world moves towards a cashless economy, the use of payment cards has become more common. However, this has also led to an increase in card fraud. EMV (Europay, MasterCard, and Visa) card authentication has been introduced to tackle this issue. In this article, we will discuss everything you need to know about EMV card authentication.
What is EMV Card Authentication?
EMV is a global standard for payment cards based on chip card technology. EMV cards contain a microprocessor chip that stores and processes data. This chip generates a unique code for each transaction, making it difficult for fraudsters to clone the card or use the information for other transactions.
EMV cards are widely used across Europe and other parts of the world. However, they are relatively new in the United States, where magnetic stripe cards are still prevalent. This has made the US a target for card fraud, and the transition to EMV cards is slowly taking place.
How Does EMV Card Authentication Work?
EMV cards have a chip that stores and processes data. When you insert an EMV card into a chip reader, the chip generates a unique code for each transaction. This code is known as a dynamic authentication code or a one-time code. The code is then sent to the issuing bank, which checks if it is valid before authorising the transaction.
The chip on the EMV card is also encrypted, making it difficult for fraudsters to clone the card or access the data stored on it. This makes it more secure than magnetic stripe cards, which are easy to clone.
Benefits of EMV Card Authentication
- Reduced Card Fraud: EMV cards are more secure than magnetic stripe cards, making it difficult for fraudsters to clone them or use the information for other transactions.
- Global Acceptance: EMV cards are widely used across Europe and other parts of the world, making it easier for travellers to use their cards internationally.
- Increased Security: The encryption of the chip on the EMV card makes it more secure than magnetic stripe cards, reducing the risk of fraud.
- Contactless Payments: EMV cards can also support contactless payments, making it easier and faster to make small transactions.
- Liability Shift: In the United States, liability for card fraud has shifted from the issuing bank to the merchant if they do not have EMV-enabled terminals. This has incentivized merchants to adopt EMV technology, reducing the risk of card fraud.
Conclusion:
EMV card authentication is a global standard for payment cards that has been introduced to reduce card fraud. EMV cards have a chip that generates a unique code for each transaction, making it difficult for fraudsters to clone the card or use the information for other transactions. EMV cards are more secure than magnetic stripe cards and are widely used across Europe and other parts of the world. The transition to EMV cards is slowly taking place in the United States, where magnetic stripe cards are still prevalent. The benefits of EMV card authentication include reduced card fraud, global acceptance, increased security, contactless payments, and liability shift.
